November 2007 | Sponsored | H.O.W.

How to Select an Ocean Carrier

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BEFORE YOU CHANGE COURSE

Ocean freight buyers are often limited by the geography of their offshore suppliers/manufacturers and stateside customers and the urgency of the shipping season when they consider making changes to their carrier networks. But there is always room for optimization. Shrewd logistics professionals periodically research and take advantage of new carrier products or changed services to leverage improvements. As the global tide continues to break over new manufacturing and logistics markets and ports of call, and cargo flows shift currents into emerging trade lanes, ocean freight buyers are awash with options and avenues for matching supply to demand and meeting customer needs.

While speed, capacity, and cost are top priorities for ocean shippers, navigating the minutiae of carrier selection can help unbundle less-visible economies and efficiencies. Shippers that are proactive in vetting potential carriers can develop partnerships that address their cargo's specific needs, leverage services and networks to streamline their supply chain, and conceivably grow their business globally and domestically.

BEFORE YOU CHANGE COURSE

FORECAST DEMAND. Before identifying possible carrier partners, shippers need to identify where their customers are and will be, and where offshore supply is coming from or migrating to. For example, a company sourcing product from Asia, but considering Eastern Europe as an alternative for moving product to the U.S. East Coast, should consider negotiating an extended contract with a carrier serving both Trans-Pacific and North Atlantic trade lanes.

Regardless of the lane in which you ship, the total cost will be impacted by the frequency of shipments with a particular carrier. Appropriately forecasting where demand will be and how much capacity you will need can help in negotiating longer-term contracts at "discounted rates."

SAILING FREQUENCY. Responding to growing customer demand and emerging logistics hotspots, ocean carriers routinely add new ports to their scheduled rotation. Cost-conscious shippers can look closely at their cargo's final destination to birddog alternative routings. In each lane, a carrier generally has a certain number of base ports, and shipments moving from base port to base port will always prove to be a more economical option.

Importantly, shippers and consignees should evaluate stateside distribution capabilities from partner ports to inland DCs to devise better strategic means for moving product to market. Emerging intermodal options at U.S. ports provide access to additional capacity, more reliable transport options, and opportunities to drive costs down even more. For example, identifying a smaller port with better intermodal infrastructure and service capabilities farther away from an inland DC may prove more valuable than importing through a congested port closer to demand.

Shippers should also consider whether carriers have existing partnerships with inland transportation providers and if they can leverage their connections to access capacity and reduce intermodal costs.

COMPARE INFORMATION. Ocean carriers increasingly post services, schedules, equipment, and rates on their Web sites. The Internet is a good place to begin matching potential carriers with your requirements.

DATA SUPPORT. EDI or Web/Internet-based data to capture key events need to support the cargo owner's supply chain system.